Promoting export-led economic growth
Ghana’s terms of trade are widening by the day, increasing from US$5 billion in 2008 to US$20 billion in 2013, thereby worsening the country’s current account position.
A trend analysis shows that the country’s overall balance of trade has consistently worsened since 2010, from a surplus of US$1.46 billion to a deficit of US$2.33 billion at the end of September 2013.
Sadly, the country’s exports are largely dominated by primary and unprocessed commodities which are subject to price fluctuations on the international market.
Interestingly, the country’s exports have been hampered by increased competition in the domestic and export markets and high production and distribution costs arising from high interest rates, obsolete equipment, inefficient infrastructural services and low productivity.
It is to address the challenges in the export sector that the government, in 2011, launched the National Industrial Policy (NIP 2011-15).
The policy aims at providing support for the land reform process and the enhancement of labour productivity through the application of new technologies.
At the Graphic Business Breakfast Meeting in Accra yesterday, participants identified land acquisition as a major bane of the country’s quest to establish agro-based industries.
The meeting, which was on the theme, “Maximising value of exports to improve Ghana’s Trade Balance”, also called for conscious efforts at import substitution.
It is in this regard that the Daily Graphic welcomes the effort by the government to double the country’s exports from the current US$2.4 billion to about US$5 billion by the end of 2017 as part of the National Export Strategy.
The Daily Graphic also encourages the government to expedite the necessary reforms to make the Export Development and Agricultural Investment Fund (EDAIF) friendlier in expanding credit to the Ghanaian private sector.
We wish to call on the government to create land banks in every district of the country to be reserved for the establishment of agro-based or export-processing industries, while giving some tax rebate to industries that are established in the rural areas.
We again call on the government to develop a competitive manufacturing sector, as well as other sectors, that adds value to manufacturing over the medium-term, while pursuing economy-wide, factor-productivity growth over the long term.
It is the hope of the Daily Graphic that if these measures are aggressively pursued, we will maximise the value of exports to improve Ghana’s trade balance and attract professionals from a host of industries, including finance, trade, housing and manufacturing, to support the country’s export drive.
But, more importantly, attitudes towards productivity must change at all levels of productivity, including the private sector.
We must move away from the state of hopelessness to develop positive attitudes towards the future of the economy.
The paradigm shift must focus on an export-led economy, instead of the import-led economy, which is engendered by a liberalisation policy and our taste for foreign goods.
This way, the extreme pressure on the cedi will reduce and we can then grow a strong foreign exchange reserve to stimulate economic growth.
